Smokers wait with bated breath for tax hike

The state of the nation's finances is going from bad to worse. Tax revenues for the first half of fiscal 2009 fell 24 percent from the same period the previous year, and estimated revenues for the entire year are expected to fall below 40 trillion yen from 46 trillion yen, according to news reports.

The government is so pressed for money that it is leaning toward increasing the tobacco tax. If a tax increase causes a sharp drop in tobacco sales, it will do more harm than good to the nation's finances. That is why "modest yet frequent" hikes have traditionally been the norm when raising the tobacco tax.

Apparently as a consequence of this policy, a pack of cigarettes in Japan costs about half as much as it does in the United States and Europe, where a pack sells for an average of 600 yen.

The Ministry of Health, Labor and Welfare has positioned itself beneath an anti-smoking banner, from where it is planning to substantially raise the tax under "a new administration free from political shackles."

The noose around the neck of tobacco smokers is tightening. Moves to ban smoking by pedestrians are spreading across the nation. This is because people smoking on the sidewalk pose a threat to other pedestrians, especially young children whose faces often come close to the burning, 700-degree tobacco in their hands.

From next spring, Kanagawa Prefecture will start to apply a partial ban on smoking in restaurants and other indoor places.

Slowly but steadily, the ratio of smokers has declined. This spring, it stood at 25 percent (39 percent for males and 12 percent for females). That means the number of smokers fell by 800,000 in a year.

In other words, a smaller number of smokers is shouldering a higher amount of tobacco tax, which comes to slightly more than 2 trillion yen. Japan Tobacco Inc. is unhappy. It has likened the tax to a fine.

But is that so? Smokers claim cigarettes relieve stress, but their addiction to tobacco is merely a disease in the form of nicotine poisoning. Logic dictates, therefore, that a tobacco tax hike would help promote healthy living. If the government really wants people to get healthier, it should raise the price of a pack of cigarettes to 1,000 yen and risk losing tax revenue.

If the government is worried about declining tax revenue, I find it questionable that it should continue to take advantage of smokers to incrementally extract ever more money from them.

We need a grander plan that does not rely on something like addictions. It is time to overhaul the entire financial system, including consumption and corporate taxes and also budget spending, taking into account the burden on future generations.

This is no time to stand back and take a puff.

--The Asahi Shimbun, Nov. 5(IHT/Asahi: November 6,2009)